Fair Work Act review report

On 2 August 2012, the federal Government released the long-awaited Report of the independent panel which reviewed the operation and impact of the Fair Work Act 2009 (FW Act).

The Review Panel – comprised of Professor Emeritus Ron McCallum AO, the Honourable Michael Moore, formerly a judge of the Federal Court of Australia and Dr John Edwards – was asked to assess the operation of the FW Act and the extent to which its effects have been consistent with the objects set out in section 3 of the FW Act. The Panel was also asked to examine the extent to which the legislation is operating as intended, and recommend areas where it could be improved consistent with the objects of the legislation.

One critical object of the FW Act is found in section 3(f), “achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action”. It is this object in particular that was the focus of many of the 254 submissions received by the Panel.

The Report [1] essentially finds that the effects of the FW Act have been broadly consistent with the legislation’s stated objectives, and that it is generally operating as intended.

According to the Review Panel, the period since the FW Act commenced operation has seen favourable outcomes in relation to wages growth, industrial disputation, employment growth and work flexibility.

For many employers, Australia’s current poor productivity performance is a matter of grave concern. The Review Panel identifies a productivity ‘slowdown’ in Australia over the last ten years. While the Report does not attribute this to the workplace relations framework, it does recognise that productivity growth underpins Australian living standards. The Report therefore makes a number of recommendations for changes to the FW Act in order to encourage greater flexibility and productivity. The debate today is whether or not these recommendations go as far as many employers consider necessary.

There are some potentially significant recommendations in the Report which will be welcomed by employers. Further, the Review Panel has rejected a number of reforms that were proposed by unions in their submissions to the Panel. On the other hand, there are several recommendations which, if implemented, are bound to cause concern.

We have identified the main recommendations in the Review Panel’s Report.

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[1]Towards more productive and equitable workplaces: An evaluation of the Fair Work legislation, available here.

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